Fixing the fracture in the ski industry

[Tricia]

SIA President @Nick Sargent was asked some tough questions in a recent article for Transworld Business.
Many of his answers ring true with me as someone who has attended SIA for retail as well as for Media over the past 7 years.
I know that, as a retailer, I visited vendors who were showing product off site, but the display and attention to detail wasn't necessarily inspiring.
As media, @Philpug and I have shown interest in vendors who were off site until we sorted out the schedule and realized we had no time to leave the convention center and get back in time to make other meetings, so we avoided seeing those who were setting up shop in locations that weren't on the floor.

We cover a lot of territory in 4 days and highlight a lot of new product in that time. It would be nice if we could see some of those who've chosen to move across the street come back to the floor.

See the whole article here.
Power in Numbers: SIA President Nick Sargent on Why a Fractured Snow Industry Won't Work

Snip from the article:
What piece of advice or mantra do you think is the most pertinent for our industry to hear as it relates to what SIA is trying to accomplish?

You can’t do it alone; it takes a community. Our industry is so passionate and emotional, and we are 100% behind these sports. I get it. I do all of them and am as passionate as it gets. For some reason, some feel like it is okay to fracture the industry to go chase down their own interests and say ‘I can do it alone.’ What we are seeing out there, with some crummy snow years, is a right sizing of our business. When you have huge national accounts filing for bankruptcy that means there are a lot of people not getting paid and a lot of product being sold for pennies on the dollar that are flooding the market. That is really going to take away from retail sales in the fall.

Everybody wants a deal, everyone is trying to get ahead one way or another, but we need to be working together as an industry if we are going to see success. We are still a snow driven industry and dependent on Mother Nature to deliver. We have to be working as a community to make our industry come together and whole again. That’s the basis on which I am starting the new SIA. In areas where we didn’t react fast enough or even over reacted, we have to be on point and first to the game. Specialty is really important to everything we do. We have to take all of this one step at a time and create best practices.


Read more at http://business.transworld.net/feat...-fractured-snow-industry/#vZ7bZlkE23jPsU4H.99

 

[Bill Talbot]

Not being in the business means I want the best dollar value with gear. This means it will be very rare if I buy anything new till late February of that season. It could also mean that since it is a want more than a need, I may even roll the dice and see what's left come the end of March!
Now I get that you in the business need to make money, but I have no shop needs, I do everything in house. So read that as ONLINE sales and much shopping around. If one of the Pugski retailers has what I'm interested in @ a competitive price, I will most certainly use them.

So while I see what Nick is saying, there may be more than one way to 'do it'. As a bit of a gear hound I will continue to try and make my ever devaluating Federal Reserve Notes go as far as I can stretch them.... Some may comment that 'what's good for the industry is good for the skiers'. They are always talking about growing the sport, making the resorts bigger and include multi seasonal use, limiting ski production numbers/2 or 3 years to a model/graphic change to keep prices up, etc.. Those really only help the people that earn their money from the business of skiing.

Me I just ski...

 

[fatbob]

Well interesting article but kinda avoids the elephant in the room that brands are running off-site meetings because they judge that the SIA overhead is too high. I guess there might be an element of filtering out the looky loos too.

He then correctly identifies that customers want a deal but then says nothing about maybe that means companies should just drop the new graphic technology bullshit and even some of the "marketing tech" and get back to solid product at a fair price. Innovation and progession is absolutely necessary but retailers and customers don't need to be confused by huge ranges with massive overlaps and gimmicks - looking at you Head with that Kers and Graphene nonsense.

 

[Drahtguy Kevin]

I went to the convention center for the first time last year after doing on-snow testing the previous years. I was blown away by the enormity. I was like a midget in a roomful of tall women -- I didn't know which way to turn.

I can't imagine trying to leave the floor for an appointment and returning in time. @Philpug and @Tricia bust their collective ass to get us the goods. The work they put in cannot be understated.

 

[Mike Thomas]

Not being in the business means I want the best dollar value with gear. This means it will be very rare if I buy anything new till late February of that season. It could also mean that since it is a want more than a need, I may even roll the dice and see what's left come the end of March!
Now I get that you in the business need to make money, but I have no shop needs, I do everything in house. So read that as ONLINE sales and much shopping around. If one of the Pugski retailers has what I'm interested in @ a competitive price, I will most certainly use them.

Me I just ski...

I fully understand what you are saying, for you, for now. You are 100% right to feel that way... but think a bit downstream.

If there are no shops, where do skis come from? The manufacturer.
If the manufacturer is selling direct, will they build and warehouse large quantities of gear? No, they will most likely begin to utilize demand flow manufacturing practices.
If they are manufacturing exactly to demand, what happens to prices??? Hint: they do not come down.

I've been reading and participating in ski forums like Pugski, Epicski and TGR for over a decade. In that time, I have heard more folks talk about buying 3, 4 or 5 pairs of skis per year, because "I got a deal I couldn't turn down!" more than I have read "I just can't afford to ski anymore, I love it but I am done." Let's face it, if you bought (not addressing anyone directly) 2 pairs of skis in a year and got great deals on both, let's say 50% off*- you really spent all of the $$ to pay full retail on a pair of skis. The price was NOT a barrier. The ski industry has spent decades 'educating' it's consumer base on how to avoid paying retail. It's not the consumers fault that the retail model is broken in the ski world, it is the industry. They have done this to themselves and frankly, they are not smart enough to understand what is happening. As an industry, thinking is at least a decade behind. They honestly do not understand how the internet has changed the business model. 15 years ago, selling cheap close-outs to a 'good' account meant they had inventory for summer tent sales- the industry still thinks that way. They try to pick a few dealers in different geographic areas to move the close-outs... as if geographic location means anything with the internet.

I have to say, if some of the smaller retails ever found out what some manufacturers do to 'help' their biggest accounts... whew. There would be murders at SIA.

* 50% Off always means off MSRP, since no one ever pays MSRP this person really save about 30%... not that I am counting or anything.

 

[scott43]

Coming at it from the bike side, I've always felt like when I read "we need to stick together", I think "we need to fix prices so we don't lose money and we limit competition". I don't know that they're being greedy..maybe it's more of a survival thing. And yeah, they do want to protect the guys that put food on the table, not the smaller guys who they think the can afford to lose. I don't recall any fracture up here in the industry..maybe it was never that coherent to begin with.

Having said that, internet sales can really hurt shops and at the end of the day, it's nice to go to someone with knowledge to get things done properly. I always joke, how will you buy ski boots on the internet? Well, you go to a shop that has them, try them on, then buy them online when you find the size. Soon there are no shops to try them on anymore. Then what? So I suppose you will get cheaper prices..for now..but what will you have in a few years? I think it's a bit of a false economy.

 

[Bill Talbot]

I fully understand what you are saying, for you, for now. You are 100% right to feel that way... but think a bit downstream.

If there are no shops, where do skis come from? The manufacturer.
If the manufacturer is selling direct, will they build and warehouse large quantities of gear? No, they will most likely begin to utilize demand flow manufacturing practices.
If they are manufacturing exactly to demand, what happens to prices??? Hint: they do not come down.

I've been reading and participating in ski forums like Pugski, Epicski and TGR for over a decade. In that time, I have heard more folks talk about buying 3, 4 or 5 pairs of skis per year, because "I got a deal I couldn't turn down!" more than I have read "I just can't afford to ski anymore, I love it but I am done." Let's face it, if you bought (not addressing anyone directly) 2 pairs of skis in a year and got great deals on both, let's say 50% off*- you really spent all of the $$ to pay full retail on a pair of skis. The price was NOT a barrier. The ski industry has spent decades 'educating' it's consumer base on how to avoid paying retail. It's not the consumers fault that the retail model is broken in the ski world, it is the industry. They have done this to themselves and frankly, they are not smart enough to understand what is happening. As an industry, thinking is at least a decade behind. They honestly do not understand how the internet has changed the business model. 15 years ago, selling cheap close-outs to a 'good' account meant they had inventory for summer tent sales- the industry still thinks that way. They try to pick a few dealers in different geographic areas to move the close-outs... as if geographic location means anything with the internet.

I have to say, if some of the smaller retails ever found out what some manufacturers do to 'help' their biggest accounts... whew. There would be murders at SIA.

* 50% Off always means off MSRP, since no one ever pays MSRP this person really save about 30%... not that I am counting or anything.

I see all three side of the equation. The manufacturer, shops and skiers. But in the example above, it's one pair of new skis versus two.
So two pair @ 30% off beats one pair @ full retail.
Do you go car shopping and pay full retail or look for the best price possible? I don't think I've been in a ski shop in more than a decade.
But since more and more 'mortar' shops also now have an internet 'wing' for online sales, that is still supporting the industry. The ski biz often reminds me of the hotel biz (and that's not really a good thing). Out of 100 customers, X pay full retail, Y pay 10% off and Z pay 25% off for the exact same 'product'. This leaves a bad taste in the mouth of X and Y in most cases IF and when they realize this.

 

[Mike Thomas]

Bill, I hope you understand that my post was in NO WAY meant to imply that you or anyone else who seek the best deal possible are doing anything wrong. My point was trying to be that pricing of skis is not the issue with the ski industry, folks buy plenty of skis. They spend the $$$, they just get more 'stuff' for it and the shops get less. No one in their right mind, if asked, would choose to pay retail over getting a healthy discount. I am NO different. The thing is, the demand side of the equation is just fine. It's the supply side that has Munchausen syndrome by proxy. This really is not a platform for me to talk about what I really think about the ski biz... so I'ma gonna stop now.

 

[Monique]

since no one ever pays MSRP

This is not strictly true. I have all the patience of a rabid chipmunk. I do my best to keep the industry going, you know, charity and all ...

 

[skibob]

Well interesting article but kinda avoids the elephant in the room that brands are running off-site meetings because they judge that the SIA overhead is too high. I guess there might be an element of filtering out the looky loos too.

He then correctly identifies that customers want a deal but then says nothing about maybe that means companies should just drop the new graphic technology bullshit and even some of the "marketing tech" and get back to solid product at a fair price. Innovation and progession is absolutely necessary but retailers and customers don't need to be confused by huge ranges with massive overlaps and gimmicks - looking at you Head with that Kers and Graphene nonsense.

I think the connection between the two extremes is a question that often eludes people in all industries. Increasing sales are uncategorically good, so we pursue increased sales. Sooner or later, you're spending so much on sales (cost of sales) that profit margin goes down. For awhile, that's ok, because a lower margin on a higher base can be okay. But then, eventually, profit itself almost always starts shrinking.

Somewhere in there, there is an opportunity for a smart and streamlined company to cut back on the money spent on sales and accept a larger margin on a smaller base.

Fatbob's point about graphics is a good example. Kastle probably has scooped the majors on this. Its kind of like fine champagne. Non-vintage expands the shelf life, but its still a premium priced product. That's good business if you can get it. Rossi, Blizzard, K2, etc may be afraid to do it. But non vintage rose works too.

 

[Philpug]

There are a lot of changes going on at SIA from this conversation to them moving their offices to Park City to not changing the dates of the show discussed HERE.

Any industry as large as the ski industry needs an organization like SIA to keep the ship righted. But there are many ways to run/change/fix the industry and no way will we all agree. @Nick Sargent has a long road ahead and Nick is taking the helm of a ship that is need of some maintenance and upkeep and I am not just talking about a fresh coat of paint and new curtains, there needs some structual modernization to happen. I hope Nick can find the time to chime in here.

Part of the problem that we have seen at the show is that is it has become a family affair. Industry shows are for one thing, conducting business. I can't tell you how many people we see that are wives, sisters, brothers, kids, neighbors, buddies, ect attending the show just to get gear or play on product. I was talking to a celebrity at the show that basically said that he won't be returning to do another appearance because not one of the autographs he signed were for shop people but they were for civilians. There is something also wrong when you are at a demo and the tester A. Does not know what their DIN is and B. Does not know what their BSL is. How are these people then qualified to discern the differences between skis?????

We actually have a few upcoming articles for the fall regarding some of my concerns about product direction and marketing so stay tuned for them.

 

[fatbob]

I'd argue that in consumer goods industries then industry shows aren't just about doing business they are at least as much about creating buzz for products and showing a sense of direction in new categories. Look at something like E3 or CES which definitely aren't about retailers putting in their orders for the next year. Car shows are essentially a platform for journalists to gush over new product etc.

So are the media attendees (including Pugski) actually more important than the retailers? After all if we assume that shopping is migrating online - do people trust the onsite reviews or do they google for an "independent" opinion.

And then it becomes a question of how far down the foodchain do we go? Not knowing your BSL isn't a sign of being totally unqualified to test skis. It's absolutely a sign of being a "normal" skiing consumer. Yes they may not be as skilled in objectively analysing the positives and negatives of a ski but they can say whether it works for them and whether it was "easy" or "demanding". And look at Trip Advisor - it's not the travel/catering industry pros now influencing whether we choose a particular hotel or restaurant - it's the unwashed masses. So maybe a radical answer is to let more ordinary joes in, not continue to hide the "industry" behind the curtain.

I can see how SIA is good for small retailers who can see everything in one place and make a selection of product from the brands they carry but in all honesty they can probably do most of that online and by Skype. Really big buyers I assume get previews or special attention anyway.

 

[Lauren]

And then it becomes a question of how far down the foodchain do we go? Not knowing your BSL isn't a sign of being totally unqualified to test skis. It's absolutely a sign of being a "normal" skiing consumer.

I completely agree with this statement. I've worked in retail, and I can first hand say it goes a long way for a sales associate to be able to tell a customer "I tried those skis out a month ago, blew me outta the water". Or even more so "I own those skis, absolutely love them". I'd argue that having people of different abilities from the shop demo skis could actually help the shop. You'd be able to have people of different levels be able to relate to a more diverse customer base.

 

[scott43]

A few things I recall from the business..this is years ago so things may have changed. We used to try to book orders in the winter for the summer season, and vice versa for the winter season. You get better pricing at the show generally but you're having to predict what you're going to sell 4 months down the road. So you walk into Brand X's booth, chat, start writing up an order. So you hope you will sell 300 of one of their models. If it comes to September and you still have 200 of that one model of moutain bike, you're not allowed to put them on sale without the permission of the manufacturer. Which I always thought kinda sucked because you buy early with the promise of a better price but then can't get rid of them despite the fact you own them. But they're protecting their other dealers. And they sure aren't offering to buy them back from you...

 

[Philpug]

I'd argue that in consumer goods industries then industry shows aren't just about doing business they are at least as much about creating buzz for products and showing a sense of direction in new categories. Look at something like E3 or CES which definitely aren't about retailers putting in their orders for the next year. Car shows are essentially a platform for journalists to gush over new product etc.

While I have not been to a E3 or CES show, I do know that the Autoshows are there to showcase product for the consumers and some ore more industry & press focused like Detroit or New York than consumer focused like Philadelphia or Dallas. I know @Tricia used to attend heavy equipement shows in Vegas, I will let her say what the attendnace was like and who was on the floor at those. SIA is there to showcase product for the retailers so they can place the orders for the following season. It is not for the consumers to touch/feel/smell everything, while few orders are indeed placed there, shop owners and buyers are there to make decisions.

So are the media attendees (including Pugski) actually more important than the retailers? After all if we assume that shopping is migrating online - do people trust the onsite reviews or do they google for an "independent" opinion.

Yes, part of the shopping is migrating on line but the brink & mortor is still the backbone of the industry. Before the "internet" we didn't hear about new product until the September issues of the magazines. Now, the information is instantanious, part of our job is indeed reporting from the floor of the show and yes, the media along with review sites like Pugski's influence has increased on what people should buy and is increasing every day.

And then it becomes a question of how far down the foodchain do we go? Not knowing your BSL isn't a sign of being totally unqualified to test skis. It's absolutely a sign of being a "normal" skiing consumer. Yes they may not be as skilled in objectively analysing the positives and negatives of a ski but they can say whether it works for them and whether it was "easy" or "demanding".

I am not talking about the average consumer not knowing their BSL, I am talking about shop people who are at the demo tests not knowing, these are there to do a job, test skis and what should their buyer stock. You don't hear what we hear when these shop testers are talking to each other, it is usualy a "Well, I liked it" or "That totally sucked".

And look at Trip Advisor - it's not the travel/catering industry pros now influencing whether we choose a particular hotel or restaurant - it's the unwashed masses. So maybe a radical answer is to let more ordinary joes in, not continue to hide the "industry" behind the curtain.

The difference here is someone isn't reviewing a hotel room or a restaurant is a controlled envirionment, they reviewing it in their intended place. When we are reviewing a product and testing it, many times it is out of context and we have to use our experience to convey how that product will react. I mentioned in another thread about having to see past a poorly performing ski because it might have had a bad tune, could the average consumer do that? It has been brought up many times why ski magazines don't have intermediate skiers testing skis, well they are intermediate skiers for a reason, they have limitations and most are actaully just people who ski and not skiers but more importantly, they might like one ski over another but have no idea why.

I can see how SIA is good for small retailers who can see everything in one place and make a selection of product from the brands they carry but in all honesty they can probably do most of that online and by Skype. Really big buyers I assume get previews or special attention anyway.

To a point, yes. To a point, 70% of your buy is already made up already, the show is to adjust change the other 30%, replacing what didn't sell well with something else or new. You can't get the texture of the fabric or how a ski flexes on line or on Skype.

 

[Tricia]

I completely agree with this statement. I've worked in retail, and I can first hand say it goes a long way for a sales associate to be able to tell a customer "I tried those skis out a month ago, blew me outta the water". Or even more so "I own those skis, absolutely love them". I'd argue that having people of different abilities from the shop demo skis could actually help the shop. You'd be able to have people of different levels be able to relate to a more diverse customer base.

@Philpug wasn't talking about you, working for a shop. He was talking about "so and so's buddy", who just wanted to geek out on the new stuff. We are seeing families with small children. These aren't people there to conduct business or do recon for a shop, they're at SIA to join the party.

 

[Philpug]

I completely agree with this statement. I've worked in retail, and I can first hand say it goes a long way for a sales associate to be able to tell a customer "I tried those skis out a month ago, blew me outta the water". Or even more so "I own those skis, absolutely love them". I'd argue that having people of different abilities from the shop demo skis could actually help the shop. You'd be able to have people of different levels be able to relate to a more diverse customer base.

Why did it blow that salesperson out of the water? Did the ski actually have a proper tune on it? Did the salesperson actully ski it in the conditons it was intened for? Or are tehy coming off of an 8 year old pair of junior rec skis and anything they got on that was "modern" on would have blown them out of the water? As far as him owning the skis...Why? Why does he own them? Is he/she the same skier that the consumer is? It doesn't matter what the salesperson skis. @Ron brought up the antidote that he was in a shop looking at skis and the sales guy said "You gotta get these, they are what Hogi skis..." Ron replied, I don't ski like and never will ski like Hogi. All..all too many cases sales people are trying to validate their own decision.

 

[Bill Talbot]

@Tricia ... you have to tell us about the goings on @ a heavy equipment show in Vegas

 

[Tricia]

@Tricia ... you have to tell us about the goings on @ a heavy equipment show in Vegas

@Philpug brought up my past experience with heavy equipment trade shows, specifically the Con/Agg Expo. The last time I attended one of those was 10 years ago, so things may have changed. My experience at Con/Agg was a lot different than my experience at SIA, because I went as a contractor to see the new Aggregate technologies and see what was going to impact our gravel pits(literally). Because there were family business' in attendance we saw children but they were children who grew up on the seat of a backhoe or rock hauler and knew that this was their future.


Not the same as kids waiting in line to get an autograph from Bode, Lindsey or Glen.

The culture at Con/Agg is different and the intent different.

 

[Philpug]

I would like to hear the Kicker guys chime in here, @kickerfrank @KickerFred and @KickerPaul. Kicker is a young company who is on this fringe that is being discussed in the original article and maybe cannot afford to be in the big room..yet. They have to watch every dollar they spend and decide where to spend it. @Cyrus Schenck with Renoun is another one. Cyrus was at the show last year, not with a booth but walking the aisles with a ski in hand.

Such as there are buying groups that attend SIA , what about a smaller selling group for these "core" for independent manufactures? A show within the show. They could get together and rent a larger space and share the costs, the Core Co-op" it could be called.

As press, it took Pugski to build the site past just a forum to get permission to attend, it wasn't just about SIA taking our money and letting us show up, we had to prove that we were serious and not just playing ski site. We know of another ski site that has said "We cannot afford to go to SIA"... "How can you afford not to go???"